Singapore a regional ‘lighthouse’ for luxury watch retailing market, says industry veteran

THE population of the United States is 55 times that of Singapore’s. Yet, US consumers buy only 3 times as many luxury watches as Singapore consumers do.

“Singapore... not only has a large local watch market but also serves as a regional hub, serving both watch customers in Asean and beyond Singapore,” business veteran in luxury products and luxury watch distribution, Alexander C Melchers, told The Business Times (BT) in an interview.

Melchers, who is general manager and managing director at the Singapore branch of trading house Melchers GmbH & Co, was speaking to BT on the occasion of the Swiss National Day about one of Switzerland’s top exports. His company works with several luxury watch brands including Patek Philippe, Breitling and Norqain.

Singapore is one of the top 6 destinations worldwide for Swiss luxury watches. In 2021, exports of Swiss watches to Singapore were valued at S$1.8 billion in value — up 0.6 per cent compared to pre-Covid 2019.

The US, the No 1 destination of Swiss watch exports, took S$4.4 billion worth — up a strong 27 per cent compared to 2019.

Melchers said the data shows how "hungry" the Singapore market is for Swiss watches. The Republic has established itself as one of the most important watch collectors’ centres in the world, he added.

“This is driven by the presence of our Singapore-born retail brands such as, but surely not limited to, The Hour Glass , Cortina Watch , Sincere Watch (belonging to Cortina now), Watches of Switzerland (belonging to THG now), who have established a world standard of watch retailing,” Melchers said.

“My interpretation is that these retailers grew as exclusive watch retailers who – different from their European and US peers – did not rely on also selling jewellery. This gave them a focus to have very well-trained and knowledgeable sales teams; and to operate totally customer centric and build a community of watch fans and enthusiasts. They literally built this market up over many years.”

He believes Singapore retailers will continue to do very well as they are operating regionally, too. The pandemic will have further strengthened their customer relationship management systems.

Said Melchers: “They also built their digital capabilities by being able to reach regional clients, and travelling is coming back. Our retailers are very agile and adjust to new markets. They are fast to pick up new trends and brands. But in the end, all of them are very customer centric, and they know what their clients need.”

The recent lifting of travel restrictions has also allowed the brand representatives to come back to Singapore. This has led to a series of high-profile brand events bringing together watch collectors and new clients interested to buy their first luxury watch, with the owners and representatives of the Swiss watch brands, Melchers said.

Melchers has witnessed the growth of the industry since he arrived in Singapore in 1997.

“When I came here, the watch retail network of the large retailers was already very powerful,” he said. “Retailers like The Hour Glass and Cortina as well as Sincere or Watches of Switzerland, who are now run by the second generation already, set the stage for phenomenal growth.

“As Singapore developed into a major hub in the region, tourism was a key driver of economic growth; and the luxury retail sector definitely benefited from this.”

Together with the emergence of the Orchard Road shopping belt, the retailers here managed to build strong relationships with their local and regional clients.

Many Asean countries have relatively high sales taxes and also sometimes luxury duties. This has further helped the Singapore luxury retail sector to grow, he added, even after the goods and services tax was introduced.

Given the strong retail network, customers have access to almost all major and smaller brands. Many, if not most, luxury brands have branded sales corners, where interested buyers can discover the full universe of the brand.

“This is one reason, for example, why Norqain and Melchers have chosen Singapore to be the location of choice for their first flagship boutique outside of Switzerland. Singapore acts like a lighthouse market,” said Melchers.

“Also, regional retailers take their cues from what is happening in Singapore. And customers who are interested to understand the brand take strong comfort and trust if they see that a brand operates a mono-brand boutique in Singapore. It is a strong signal of confidence and commitment. And it is also a costly investment.”

The most important growth factor, however, is the extraordinary high quality of the retail staff in Singapore, their service, and the ability to explain and to build enthusiasm around the world of mechanical luxury watches, Melchers said.

The business model to sell these fine watches is not purely transactional, he added. Rather, it is to build long-term relations and friendships between the brands and the watch owners.